Trying to Understand Obama's Intentions

14 posts / 0 new
Last post
Lemonyellowschwin's picture
Lemonyellowschwin
Status: Platinum Member (Offline)
Joined: Apr 22 2008
Posts: 547
Trying to Understand Obama's Intentions

From his recent radio address:

"And we now risk falling into a deflationary spiral that could increase our massive debt even further."

I don't think we need to read between the lines here -- we can read the line itself.  Obama has been advised that deflation must be avoided.  He has been advised that deflation will increase our debt.  How?  Through lower tax revenue and interest payments in dollars that are worth more?  Anything I'm missing here?

His comments suggest he would prefer an inflationary outcome.  Anyone care to add their $.02?

rvwainscott's picture
rvwainscott
Status: Member (Offline)
Joined: Aug 31 2008
Posts: 9
Re: Trying to Understand Obama's Intentions

Greetings,

 You can have any intentions that you want but it is clear to me that Obama, by staffing his White House with former Clinton staffers, has no one to turn to and will not be able to get us out of this mess.

 

Look, organizations filter their members and anyone that might have any idea as to how to get us out of this mess is no where near nor has ever been anywhere near a position of power or influence.   These guys love free trade, low interest rates, moderate unemployment and a roaring stock market.  Anyone, and I mean anyone, that didn't agree with that thinking was forced out a long time ago.  

 Look, low interest rates got us into this trouble so what are they doing? lowering interest rates.

Free trade has destroyed the middle class so what are they proposing? more free trade.

Easy access to credit was a big factor too so what are they doing? pouring trillions into the banking system so that the cheap credit can flow again.

Picking someone from the federal reserve to run the treasury department wont make it better either.  I strongly suspect that, just like in the great depression, the longer these fools try to keep things going, the harder and longer it will fall.

Hang on tight.

Ray Hewitt's picture
Ray Hewitt
Status: Gold Member (Offline)
Joined: Apr 5 2008
Posts: 458
Re: Trying to Understand Obama's Intentions

The man is a product of a dysfunctional and criminal political system; assume the worst. Already he's hiring zionists and Clinton  holdovers, including Hillary herself. Why Hillary? My guesss is that it's a quid pro quo. For the Secretary of State job, she promises not to run against him in 2012.

He will do everything in  his power to maintain the power of the Federal Government. When the credit runs out and the bond market collapses along with the dollar, they've always got the printing press - and they'll use it too. It's a question of when matters get to that point? My personal opinion is that we are at least two years away.

Lemonyellowschwin's picture
Lemonyellowschwin
Status: Platinum Member (Offline)
Joined: Apr 22 2008
Posts: 547
Re: Trying to Understand Obama's Intentions

Let's try to keep this focused, eh?.  I made the post because one of Chris's premises, as I understand it, is that, when push comes to shove, political pressure is more likely to cause political leaders and policy makers to choose a course consistent with causing inflation rather than a policy that allows the economy to take a more natural course (down, down, down).  Janzen's KaPoom theory is similarly premised.  Now, when it became clear that Obama was taking some advice from Paul Volker, I began to wonder whether this premise was correct.  But his radio statement seems consistent with a policy of inflation.  That's all.  I don't think we need to get too far off track on this.

DurangoKid's picture
DurangoKid
Status: Silver Member (Offline)
Joined: Oct 25 2008
Posts: 174
Re: Trying to Understand Obama's Intentions

What are Obama’s Intentions? Pretty simple, really.  The Powers That Be have anointed Obama because they know that he'll continue the same paradigm that has guided all presidents since the Spanish American War and arguably way before then.  Obama will manage their empire according to their wishes.  If his appointment to the Treasury doesn't clue you in, nothing will.  The change Obama talked about is perhaps only one thing.  He's proof positive that a member of an oppressed minority can internalize the values of the oppressor.  I doubt even Obama is aware of it.  Or, perhaps the change was the ouster of the Right Wing of the Property Party for the Not Quite as Right Wing of the Property Party.  Either way, the effect is still the same.  The bankers who seized control of the economy in 1913 with the passage of the Federal Reserve Act are still in control. In a market economy, all goods and services are exchanged for money in one form or another.  Money is only a symbolic representation of value.  It could be a gold coin, Treasury note, tradable debt instruments, or even a stick with notches carved in it.  Not all money is created equal, though.   Commodity, or specie money has some advantages.  It circulates without an interest burden and is not subject to deflation short of hoarding or removal by the government.  Unfortunately, being a commodity, the supply of money cannot grow as the economy grows.  More gold, for example must be mined to increase the quantity of money in circulation.  On the other hand, the Spanish experienced a monstrous inflation when the hoards of gold from the New World hit the shores of Spain.  Notes representing gold on deposit are subject to various frauds and swindles, like printing more notes than gold or alloying the gold with lesser metals.  Random audits are the only real guarantee against such chicanery.  Be that as it may, a return to a specie currency is out of the question.  There is simply too much value in the economy to be matched by some precious metal. An alternative might be notes issued by the Treasury.  These notes could be spent into the economy for infrastructure or other commodities.  They would represent the value of those expenditures and circulate ad infinitum without paying interest to private banks such as the Federal Reserve System.  Another advantage of this system of money is that it is under somewhat more democratic control.  The government can only go so far against the will of the people.  Private banks are not so constrained.  Making the regulation of the currency a public affair would also provide a forum for debate.  No such public debate takes place at the Fed. Unfortunately, the money system in place now is has the worst characteristics of any monetary system.  All money is lent at interest into existence by private banks, namely the Federal Reserve System.  This money comes into existence by private entities for private interests.  The good of the country as a whole is seldom a consideration.  In fact, laws regulating our currency are written by banking interests and passed by a congress dependent on those banks for campaign contributions.  Typically, enough congress people are on board to give the banking interests much of what they desire.  And, what they desire is control.  By controlling the terms of debt, banks can determine how much money is in circulation.  When they make money plentiful, the economy grows and the interest payments flow in.  When money is scarce, growth slows and real assets flow in place of interest through foreclosure.  Either way, the bankers win. In our current circumstance, we see how an overextended debt system has come crashing down.  Some banks and brokerages have failed.  But, is this the crisis it appears to be?  When the $700 billion finally makes it’s way into the banking system, those failures won’t matter so much.  The owners of the banks will in fact do quite well.  The government is poised to buy up bank stock and failed assets.  The owners of the banks will be off the hook at taxpayer expense.  Remember all money is debt-money.  They’ll collect interest on that bail-out money as well.  You see, the Treasury doesn’t issue money; it issues bonds or IOU’s.  Come April 15th Joe Taxpayer will fork over about 25% of his tax burden to the Fed to pay interest on the currency lent on those bonds as collateral. Banks may fail, but the banking class will continue and profit quite handsomely.  Ask yourself what Obama is doing to change that?  He’s appointed the head of the New York branch of the Federal Reserve to stand watch over the giveaway of the millennium.  In short, nothing. Yet, the problem is deeper than parasitic bankers living off the labor of others.  The institution of compound interest demands that we kill the planet to feed the institution of banking.  If you’ve sat through the Crash Course (http://www.peakprosperity.com/crashcourse), you’re well acquainted with the problem of diminishing resources in both kind and quality.  Actually, the resource “problem” is more like a “constraint”.  We are constrained by the quantity of resources available.  No amount of debt-money can conjure oil out of a hole in the ground if the deposit has run dry.  Free Market superstition is equally useless when it comes to finding replacements for oil or some other critical resource.  Some economist postulated that when copper runs short, we’ll just make copper out of something else.  Something else like what?  When the hydrocarbon subsidy is sufficiently diminished, we will be constrained by solar flux in terms of available energy for agriculture and non-food commodities.  Is it reasonable to expect that a monetary system that demands eternal exponential growth can survive in an environment depleted of the necessary resources?  To address this problem and make any substantive progress toward solving it means fundamentally abandoning most if not all of the existing institutions of finance.  Is that one of Obama’s changes? 

Recommended Reading and Viewing: 

The Party’s Over by Richard Heinberg

The End of the Oil Age by Dale Allen Pfeiffer

Collapse by Jared Diamond

World Made By Hand by James Howard Kunstler

The Long Emergency by James Howard Kunstler 

Money As Debt:http://video.google.com/videoplay?docid=-9050474362583451279 

The Money Masters:

http://video.google.com/videosearch?q=money+masters&emb=0#

 

ds's picture
ds
Status: Bronze Member (Offline)
Joined: Oct 13 2008
Posts: 43
Re: Trying to Understand Obama's Intentions
Lemonyellowschwin wrote:

From his recent radio address:

"And we now risk falling into a deflationary spiral that could increase our massive debt even further."

I don't think we need to read between the lines here -- we can read the line itself.  Obama has been advised that deflation must be avoided.  He has been advised that deflation will increase our debt.  How?  Through lower tax revenue and interest payments in dollars that are worth more?  Anything I'm missing here?

His comments suggest he would prefer an inflationary outcome.  Anyone care to add their $.02?

I did not hear the radio address, but I will respond to the quotes you included.

Deflation increases debt load because as the dollar appreciates, the amount owed on debts increases relative to the price of other assets.

An inflationary outcome would preferred by most rational people, IMO. If you have the good of the country and its citizens in mind, an inflationary outcome will address many problems we now face. For example, falling housing prices are a problem inflation would reverse. Furthermore, inflation will reduce the relative debt load of everyone, including the government.

Inflation is another form of taxation, but it is probably preferable to directly raising taxes.

Those Austrian economy fanboys do not appear to realize that their solutions are just not politically acceptable. There is zero chance any leader will embrace the amount of pain required under that solution. I'm not even convinced Austrian economics is a great solution even if it was politically practical -- which it is certainly not.

 

I am glad to hear, based on the quote above, that Obama has his eye on the deflationary risks. L. Summers, who advises Obama, keeps informed of Rubini's views, which I think is a good thing.

joe2baba's picture
joe2baba
Status: Martenson Brigade Member (Offline)
Joined: Jun 17 2008
Posts: 807
Re: Trying to Understand Obama's Intentions

hi lemon

i found the posts to be very focused. you brought up obama. i suggest you look at it from the top down you can follow the money or if you choose see who benefits. the monetary policies will be more of the same because the bankers make the policy. they have made the policy since 1913. btw anybody get out to end the fed today?

his appointments are a clear indication he prefers inflation ......show me a politician who doesnt. ron paul excluded.

the durango kid and hewittr are right on the money ...no pun. when you load up with clinton people and you pick the number two man in the fed for treasury just what is it you expect in the way of change? when the messiah took 4x the money from wall street than mac what did you think ?

sorry but when i look into the eyes of the obama koolaid heads i have to remind myself that there but for fortune go i.

in 2 years there will be a twelve step group for the depressed obama addicts.(DOA)

if you do the same thing over and over and expect to get a different result ..............you are insane.

thank you durango and hewittr for placing the focus where it belongs

gyrogearloose's picture
gyrogearloose
Status: Platinum Member (Offline)
Joined: Sep 8 2008
Posts: 537
Re: Trying to Understand Obama's Intentions
DurangoKid wrote:

An alternative might be notes issued by the Treasury.  These notes could be spent into the economy for infrastructure or other commodities. 

Many governments have tried this...  The problem is that every time, they just carrying on printing notes and inflate the notes to their heating value in a fire.

I have become a bit of a gold bug. In interesting discussions with a non gold bug, a couple of things keep popping up in thought experiments.

Using gold and silver forces excesses in spending to be borne immediately.

The government can't easily just print more.

Central banks and governments HATE both of these, they want to put of economic pain as long as they are in power because they believe that if the economy dives they will get the blame and be voted out.

 

Spanish gold inflation issue was an anomaly, but unlikely to be repeated (  invasion and striping another country of its wealth and carting it home ? )

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2237
Re: Trying to Understand Obama's Intentions

While I want to believe that Obama will be different, and bring a refreshing breath of  intelligent problem solving to our Federal Government, I find myself concerned about the picks he has made for his Treasury Team, given their histories and past affiliations.  I try to live by a slightly modified version of the Da Vinci quote on Nichoman's posts:"Lord, give me the STRENGTH and WISDOM to see things as they are...not the way I [want to] believe they are." 

Anyhow, Asia Times online has an interesting article on this subject, "Obama's one-trick wizards"
by Spengler, at http://www.atimes.com/atimes/Global_Economy/JK25Dj06.html .   The last 3 paragraphs provides a good summary:

"...Without leverage, the clever folk around Barack Obama are fleas without a dog. None of them invented anything, introduced an important new product, opened a new market, or did anything that reached into the lives of ordinary people. They wore expensive cufflinks, read balance sheets, exercised regularly, sat on philanthropic boards, and assumed that their flea's ride on the Reagan dog would last forever.

All they knew was leverage, and now that the world is de-levering, they are trying to put leverage back into the system. One almost can hear Mortimer Duke, Don Ameche's charcter in Trading Places, shouting, "Now, you listen to me! I want trading reopened right now. Get those brokers back in here! Turn those machines back on!"

Of course, nothing excludes the possibility that Obama's team will come up with something constructive. But there is no reason to expect a drastic change from the crisis response of the same sort of people (starting with Treasury Secretary Paulson) in the Bush administration. They will bail out incompetent, failing firms and drop money from helicopters and call it a stimulus package. And it will turn out no better than it did for the humiliated Republicans.

"

I still hope Obama will be the intelligent  problem solver and good person I hope for, but only time will tell.

fhornberger's picture
fhornberger
Status: Member (Offline)
Joined: May 5 2010
Posts: 1
Re: Trying to Understand Obama's Intentions

VIDEO: See 3 spoof videos at

Welcome Comrades ! We are now No. 1!

Yes the construction jobs market is now #1, but instead of leading the nation in employment, we now lead in UNEMPLOYMENT.

You ask for Help! We give you... . the Job Nazi, a humorous, interactive job board for the A/E/C industry that won't help you find work, but will offer you "soup" if you get in "line."

The website is being developed to help construction workers find HOPE in a depressed and struggling construction jobs market, and CHANGE in their unemployment status.

The construction industry has historically been the largest employment market in America, but today it is now the largest UNEMPLOYMENT market.

The Associated General Contractors (AGC.org) reported, "Construction Unemployment Rate Hits 27.1% as another 64,000 Construction Workers Lost Jobs in February 2010, according to data from the U.S. Bureau of Labor Statistics (http://newsletters.agc.org/datadigest/2010/03/0...)
The Good News!

With over 5,000 current job listings for the construction industry (A/E/C), the Job Nazi is in a position to help you, or NOT.

Enjoy the humorous interactivity with the animated Job Nazi as he interviews you to decide if he will allow you to APPLY to a construction jobs listing, or send you to the UNEMPLOYMENT section of the site with a biting "No Job for You!"

Good luck Comrades!

deggleton's picture
deggleton
Status: Gold Member (Offline)
Joined: Mar 18 2008
Posts: 250
Re: Trying to Understand Obama's Intentions
fhornberger wrote:

The construction industry has historically been the largest employment market in America, but today it is now the largest UNEMPLOYMENT market.

Good luck Comrades!

I haven't figured out why you resurrected the old thread in order to share that, but I'll join you off topic to point out that construction is more associated with growth than with prosperity, and we're having to choose between them, to the extent that we face the truth about the three Es.

Hopefully, the HomeStar legislation in Congress now will get to the president's desk and a good number of constructionists will get into retrofitting what their predecessors (if not they, themselves) built without questioning the designed and value-engineered defects and inefficiencies they were imposing on occupants and owners.

agitating prop's picture
agitating prop
Status: Platinum Member (Offline)
Joined: May 28 2009
Posts: 854
Re: Trying to Understand Obama's Intentions
Ray Hewitt wrote:

The man is a product of a dysfunctional and criminal political system; assume the worst. Already he's hiring zionists and Clinton  holdovers, including Hillary herself. Why Hillary? My guesss is that it's a quid pro quo. For the Secretary of State job, she promises not to run against him in 2012.

He will do everything in  his power to maintain the power of the Federal Government. When the credit runs out and the bond market collapses along with the dollar, they've always got the printing press - and they'll use it too. It's a question of when matters get to that point? My personal opinion is that we are at least two years away.

His actions thus far underline that he is a war mongering, inflation engendering puppet. Thanks for your comments.

agitating prop's picture
agitating prop
Status: Platinum Member (Offline)
Joined: May 28 2009
Posts: 854
Re: Trying to Understand Obama's Intentions

redundant. Woops.

docmims's picture
docmims
Status: Platinum Member (Offline)
Joined: Jun 17 2009
Posts: 644
Re: Trying to Understand Obama's Intentions

I really don't want to be President for Life, but since the market is crashing and the dollar is crashing, I think we should suspend the elections and not upset the status quo till things settle down a bit.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments